The cryptocurrency market, particularly Bitcoin, has been experiencing significant volatility. Despite a strong start in June, investor sentiment has shifted to caution, leading to a period of price consolidation. Bitcoin has been hovering above $63,000 after facing resistance at $70,000, with current trading around $64,240.Key factors influencing the market include:
Short-Term Price Cap: Bitcoin's price is expected to remain constrained in the near term. There has been substantial selling of Bitcoin call options set to expire next month, indicating low expectations for immediate price movement. However, aggressive buying of call options for later in the year suggests anticipated major price movements around the US elections, a period historically marked by financial market volatility.
Miner Activity: Miners are under pressure to sell due to high breakeven prices following the recent Bitcoin halving. This has led to a significant reduction in miner BTC holdings, which have dropped to their lowest levels in 14 years. The continuous supply of Bitcoin entering the market from miners can suppress price growth.
Market Sentiment: The market has been unsettled by large supplies of Bitcoin entering the market, such as the German government's sale of 3,000 BTC with plans to offload an additional 47,000 BTC. This influx can create panic and further depress prices.
ETF Market Sell-Off: There has been a continuous sell-off from the exchange-traded funds (ETFs) market, with outflows exceeding $500 million over the past week. This indicates a lack of confidence among institutional investors.
Despite these bearish factors, there are positive developments, such as MicroStrategy's purchase of 11,931 BTC and BitMEX CEO Arthur Hayes' suggestion that the Japanese banking crisis could trigger a BTC bull run. Its possible we may see this consolidation phase last until September 2024, with a potential bull run expected by late 2024.
Clues we are out of consolidation :
Bullish - we break above $73,000 and hold it as support. Then we will likely see a new leg up to $80,000 or higher.
Bearish - breaking below 59,500 is bearish and will push us down to much lower levels. We can fall below but I would not want to see a weekly close below that level. If that happens, we may be waiting a long time to return to a bullish trend.
Thank you for reading! For the latest crypto news, personally made tutorials, signals, chart reviews, and more, be sure to follow me on Twitter at
@cryptoead
and subscribe to my YouTube channel
AplusCrypto
. Don't forget to visit my website
apluscrypto.org
for even more exclusive content.
Stay informed, stay ahead, and keep trading smart!
Crypto Trader and Angel Investor, Jason Ead
